Characterstics of a Company

1. Artificial Person: A company is an artificial person, which exists only in the eyes of law. The company carries business on its own behalf. It has a right to sue and can be sued, can have its own property and its own bank account. It can also own money and be a creditor.

2. Created by Law: A company can be formed only with registration. It has to fulfill a lot of formalities to be registered. It has also to fulfill a lot of legal formalities in order to be dissolved.

3. Perpetual Succession: A company has a continuous existence. Its existence does not affected by admission, retirement, death or insolvency of its members. The members may come or go but the company may go forever. Only law can terminate its existence

4. Limited Liability: The liability of every member is limited to the face value of shares, held by him.

5. Voluntary Association: A company is a voluntary association. It can not compel any one to become its member or shareholder.

6. Capital Structure: A company has to mention its maximum capital requirements in future in its memorandum of association. Its capital is divided into shares, which are easily transferable from person to person.

7. Common Seal: As a company is an artificial person, so it can sign any type of contracts. For this purpose its requires a common seal which acts as the official signatories of the company. All the contracts prepared by its directors must bear seal of the company.

8. Democratic Ownership: The directors of a company are elected by its shareholders in a democratic way.